In a general sense, it's a bad time to be a major broadcasting network. The maturation of the cable/satellite industry has led to a universe of so many channels that fragmentation of audiences has forced the corporate TV suits to become ever more creative and to think outside of that proverbial box. Disney's
All of these conglomerates have interests in cable channels, so they do participate in the growth of that important sector. But those interests alone don't address the dragging effects of high programming costs and the aforementioned dwindling viewer base in a perfect manner. There's no question that performance issues at a network can place a significant drag on a company's earnings.
Producing a calendar year of programming sans repeated showings is an interesting solution. Not only does it replicate the more nimble attributes of the networks' cable colleagues, it also offers an added side benefit. Since the major networks retain an ownership stake of many shows in their inventory, off-net syndication deals and DVD distribution would be more valuable in theory if an episode of a show sees minimal exposure.
There's another, better option that networks have been exploring as well to keep fresh: programming a run of a finite series. For instance, ABC is airing Stephen King's Kingdom Hospital, which is designed to end this season. Of course, if the ratings warrant it, ABC could bring the show back. But the idea of a finite story arc ensures an almost guerrilla approach to the business: Get in, then get out before the audience becomes tired of the plot. This is accomplished, to a large degree, via the exploitation of the reality series genre, such as Survivor. Unfortunately, one has to wonder when that fad is going to fade out, and when the expenses for a phenomenon such as The Apprentice will present a similar escalation-of-cost conundrum for multiple seasons.
The ideal, naturally, is to nurture a well-executed asset year after year and build a nice franchise; the problem is, as time goes on, the price for quality increases seemingly exponentially. That just isn't feasible for continued addition of economic value under current conditions. Ratings equal profits ultimately, so to keep eyeballs loyal to a broadcasting brand -- and, subsequently, the ad revenues growing -- a policy of no-repeats could help substantially, so long as the costs for the extra time can be adequately contained.
Talk about all your favorite shows with other Fools on our Television Banter discussion board.
Fool contributor Steven Mallas owns shares of Disney and General Electric.
More from The Motley Fool
1 Major Clue That Facebook Wants to Expand Into E-Commerce
The social network adds a respected finance executive to its board.
Why GNC Holdings, Inc. Stock Skyrocketed Nearly 50% Today
The health and wellness retailer rallied on an encouraging quarterly update. Here's what investors need to know.
Is HCP, Inc. a Buy?
The specialty REIT's stock has been taking it on the chin. Here's a look at whether that makes it a good deal now.